Evergrande Financial Panic - Corona is not the only Contagion China is exporting

[mindlessobserver]

You are kidding right? Or are you so far gone down the rabbit hole that you don't think China can just bail this out?

Also, why would they? If the firm has already BUILT the infrastructure they don't give a single shit about foreign loans they took out to do it. The bridge/apartment/subway is still there.

China can print more cash if really required anyway, they don't need any US influence here.

Edit: I thought this was in The Bidness, apologies keep on with your hot takes A&N autists.

That is part of the problem actually. Alot of their construction projects sit unfinished, over 3 million workers have not been paid and more importantly, the idiots also paid their suppliers in script rather then cash up front. Part of what allowed this company to grow so large so quickly is that they used debt to the exclusion of capital. Capital in flow from new buyers was used to pay existing debt obligations.

It's essentially a massive Ponzi Scheme, but in real estate as opposed to financial services. The only difference is that instead of a growing pile of investors they needed to pay out they had a growing pile of creditors. And when the Chicoms made it harder to bring in fresh money they were absolutely screwed.

 

[RA-5C Vigilante]

Me Chinese
Me no know
Me buy twelve houses
Economy blows!

 

[Maratus volans]

This has the possibility of being way worse than 2008. Unlike then, most governments around the world are tapped out with COVID spending and have kept interest rates low since, well, 2008. Unless the Chinese sweep all of this under the rug fast, it's going to cause lots and lots of problems.

 

[wtfNeedSignUp]

+1 on the USA bailing out the company using some retarded logic.

 

[Meat Target]

+1 on the USA bailing out the company using some retarded logic.

"It's spreading Democracy, just like the Marshall Plan!"

 

[Super-Chevy454]

+1 on the USA bailing out the company using some retarded logic.

And no need to imagine what kind of rabble Biden will said.

 

[Gender: Xenomorph]

Ah the glorious Chinese Communism succumbed to something as simple as a ponzi scheme.

Gotta mark them as 'not true communists' now. *sight* Communism has never been tried

 

[mindlessobserver]

Not loving how much the financial news personalities are sucking off the CCP right now. They are convinced there is nothing to worry about because glorious leader Xi Xinping will lead the masses to victory over this debt crisis!

They are whistling in the dark. Apparently alot of western banks ARE holding bags in this. I've heard names from Credite Suisse to Blackrock.

 

[Jump]

What does this mean for the US$? Should I have gotten more motherfucker kiwicoins?

 

[Super-Chevy454]

Not loving how much the financial news personalities are sucking off the CCP right now. They are convinced there is nothing to worry about because glorious leader Xi Xinping will lead the masses to victory over this debt crisis!

They are whistling in the dark. Apparently alot of western banks ARE holding bags in this. I've heard names from Credite Suisse to Blackrock.

And little they knew then Xi will throw them under the bus when the first opportunity will come.

 

[Billy Beer]

Biden has already said he will bail out the chinks. It was in the Biden megathread.

Not only that, but think how much real estate the chinks own in foreign lands. London is almost all chinky owned. If they default on those properties and bail (putting china first over other countries) then the value of all of those major cities take a nosedive, which means other foreign and domestic investors lose money, which means they default on payments/sell cheap...

You get what you fucking deserve. Light the fuse on this chinese firecracker.

Edit: If Biden does bail china out, I think it will be in the form of 'transfer of property ownership'. As in, Biden will buy Chinese owned American property from the Chinks.

 

[Kramer on the phone]

And little they knew then Xi will throw them under the bus when the first opportunity will come.

didn't soros call out china for doing that type of shit literally a week ago? someone's pulling his own big short.

 

[Super-Chevy454]

didn't soros call out china for doing that type of shit literally a week ago? someone's pulling his own big short.

I guess Soros had lost control of the Frankenstein monster he created.

 

[mindlessobserver]

Crypto markets are about to get the red dildo again as markets in Asia start going. The debt market over there is going to go full Panic, and US Dollar Tether has MASSIVE exposure to the Asian debt market.

Get out of Tether.

 

[The golden neckbeard]

Its a nothingburger for our capital markets...crypto on the otherhand. Alot of Chinese people have money in crypto and are liquidating.

CCP will bail them out... some exec guys will get executed or jailed as they should and life will go on and the assets will redistributed accordingly. XI wont sit on this..its urgent and right now word is coming out that a rescue package is in the works.

Wonder what @Hangly could tell us about street level sentiment. From what i understand alot of working class chinese had bonds and property and are pissed.

 

[HumanHive]

Even if Evergrande is bailed out, it only will be a bandaid on the reality that China has a massive housing bubble and a large percentage of newly constructed towns and cities will be ghost towns. This was not merely some Enron tier scheme to defraud people, this is a sick economy that assumes a population growth and demand that isn’t there.

 

[The golden neckbeard]

Even if Evergrande is bailed out, it only will be a bandaid on the reality that China has a massive housing bubble and a large percentage of newly constructed towns and cities will be ghost towns. This was not merely some Enron tier scheme to defraud people, this is a sick economy that assumes a population growth and demand that isn’t there.

Yeah but there is no contagion here.

The problem is inherently a chinese one.

 

[AMHOLIO]

Wait should I donate to the forum my autismbux I collected with brave now or wait? Also should I panic now or later?

 

[No. 7 cat]

Will this somehow down the line stop Blackrock etc. buying small housings to rent out, hiking prices in communities? Probably not. That's a real international contagion happening everywhere it isn't banned (at least Justin Castro did one good thing).

The Chinese population is falling thanks to the only semi reversed One Child, so this has potential for a new disaster porno.

 

[Overly Serious]

Amused me - this was Blackrock's stance one month ago. There was a dude on Twitter who called this back in July - found it via Michael J Bury's twitter but Bury has gone dark again so I can't find it now. According to this guy there isn't a lot of direct exposure in the West to Evergrande's debts. About $9bn. Though there are a couple of entities like HSBC which have more. China isn't big on foreign ownership so we (the West) are fairly insulated. Doesn't mean it wont and hasn't caused some fear of contagion.

People keep comparing this to Lehman Bros. but they were a bank. Then again, in China property developers like Evergrande kind of function as banks because people pay into them over time as down-payments on their houses. Lot of ordinary Chinese people right now who were paying all their adult lives into this company to get their own house and now potentially have nothing to show for literal decades of work. Horrible to contemplate. And many employees were forced to accept some kind of corporate IOU scrip in place of wages. I don't think Xi will bail out Evergrande. I think he will set up some sort of compensation scheme for people so they still get their homes. If he's smart, which I think he is, he wont save this Ponzi scheme company. In which case, Communist China will be more true to Capitalism than the West itself.